This site is not associated with, nor does it represent the views of any particular fire department. It also has no association with the ISO.
The use or application of the ISO rating system varies all over the country.
Check with your local fire department, or the ISO, if you have any questions.

ISO
Ratings and the Fire Service

ISO - Insurance Service Office - This is a,
for profit, organization that provides statistical information on risk.
For
many years the "ISO Rating" had a large impact on most fire departments.
The ISO (PPC) rating is from 10 - 1. With "1" being the best.
At one time, almost, all insurance companies calculated rates based upon
the ISO rating. ISO would come to your city and assess a Public Protection Classification. They would then sell this data to the insurance companies.
Just about every aspect of a city and a fire department was evaluated
in determining
the
ISO rating.
They
would
give
points for
everything from the training aids a fire department owned to the distance
between fire hydrants. ISO wanted fire departments to conduct 20 hours
of training per man, each month, in order to maximize points for every
training aid. Historically, very few cities ever received a "Class
1" rating.
There have been times where only one city, out of the nation, would receive
a "1".
Presently there may be as many as 40+ cities with a "1" rating
in the U.S. This is still a small percentage when one considers the thousands
of communities nationwide. There is little incentive for a community to
strive for a "1" rating since the step from a "Class 2" to
a "Class 1" results in little or no difference in homeowner rates. When
a city does get a "Class 1" rating they will often proudly display
it on their patches, apparatus or website.

But
now ISO ratings might have very little, if any, effect on insurance premium
rates in many states. Some insurance companies have discontinued
purchasing ISO data and using it to calculate rates. Instead of using
a theoretical risk evaluation they have opted for a system where they
use the actual loss within a zip code. (This includes all losses due
to fire, flood, lightening, hail, etc.) After an article, a few years
ago, on the subject, in an International
Association of Fire Chiefs newsletter about how State Farm Insurance
had decided to go to a "subzone" system in several states, State Farm was contacted. State Farm told me that they felt that they were one of
the last companies to go to the zip code method of calculating premiums.
They thought that most smaller companies had adopted this prior to them. State
Farm is the largest homeowner insurance company, in the U.S., and writes
over a third of all homeowner policies in many states with a 20% average
nationwide.

As
of 2001 State Farm has abandoned the use of ISO in Illinois, Texas, Oklahoma,
Pennsylvania, Arizona, Minnesota, Nevada, New Mexico, Vermont, and Wisconsin
in favor of the Subzone Rating Factor System. They have plans to do so
in other states. (See
magazine articles link.)

"Every city, town or area that provides fire protection services is subject to being graded to establish a PPC. Individual buildings -- including your house -- are subject to the community's PPC. When calculating property insurance premiums, insurance companies using the PPC apply a factor that reflects a particular community's PPC."

In some states the insurance companies can use a host of other factors to determine your insurance premium. Some companies will place a great deal of influence on your credit score. (Another reason to improve your score as much as possible.)

Keep
something in mind as you consider the effect of ISO in your area. Insurance
is something often highly regulated by individual states. While State Farm
has abandoned the use of the ISO, Public Protection Classification (PPC)
rating in many states, they may not be allowed to do so in others. A few
states have successfully stopped State Farm from implementing the new system.
(i.e. Louisiana and North Carolina) A few others have tried to fight State
Farm's desire to change. (Arkansas)
The state of Georgia requires all insurance agencies to consider ISO ratings
in setting premium rates.

In
many cases it is the fire associations or fire chiefs who are fighting
this change. The perception might be that dropping the use of ISO ratings system
hurts
fire
departments.
Many departments, especially rural ones, use the structure of the ISO rating
system as a way to justify resources in budget discussions. ISO rates everything
from the amount of fire apparatus to the age of it. You can get points
for very specific types of training equipment. Examples of this would be "cut-away" fire
hydrants or pumps. Just about everything a fire department has, or does,
is evaluated. Fire departments fear, that without ISO's influence, convincing
cities to buy equipment, or hire personnel, will be harder.

But
some chiefs believe that no longer depending upon ISO has made their job
easier. They are now better able to paint a picture where more people or
better equipment translates into lower fire loss. How well the fire department
performs, which can be related to how well it is equipped, staffed and
trained, directly affects insurance rates. Lower insurance rates could
also mean more people and industry* might move to a city. Many city councils
can now be made to see a value in having a good fire department. Fire prevention
programs and better code enforcement can be an easier sell also.

*Note:
In some states ISO ratings might still be used to calculate commercial
insurance rates while zip code loss, or the "subzone" system is used for homeowners.

There
are many states where ISO is still the predominant factor in setting insurance
rates. But even in states where ISO is no longer used, many fire departments
have continued to gauge their success by their ISO ratings. They often
boast that an improvement in ISO / PPC rating will translate into a certain
percentage rate of savings for the homeowner. Perhaps they just like having a yardstick by which to measure
their success. Some may see it as bragging rights. But apparently, some
may not know that this change has taken place. ISO is not spending time
and money to let people know where the value or their services have been
diminished. (Who would?) While it is possible that some insurance company
might still use ISO in any state, it is not likely that even a majority,
of homeowners, will see a reduction in premiums in a state listed above,
if a rating is improved. You can find many fire departments, in the states
mentioned
above, who say on their website, that a better ISO rating = lower insurance
rates. Some declare it emphatically. "...this means an approximate
14% reduction in homeowner’s insurance premiums" Others
might just imply it. They may say something like, "...is recognized when
home insurance rates are determined."

If
anyone has more current information on ISO, please send it to me.

Update:

I did recently receive an email from a concerned retired N. J. Fire Chief.
His name and other information lead me to discover that he is probably very knowledgeable.
I emailed him back with my response and a request to use his name. I never heard from him again.
I figured my email ended up on his spam folder. Having said that, here is his comment and my response.

His name has been omitted.

"You need to update the ISO information. 9 out of the top 10 insurance companies use ISO's data, including State Farm."

That was the extent of the message I received. Here is my response. I have no idea if he every received it.

Dear Chief,

The information I have is that they “use” it, but it is a tiny part of their assessment.

When I contacted State Farm (in 2011) they told me that the factor that determines your actual rate the most, is your credit score.
As I am sure you know, this can vary greatly from state to state.

All I am after is accuracy. If you can send me some documentation, from State Farm, or whoever, I would love to pass that along.

Until then, may I put your email on the website for people to see?
I want to give them another perspective.
I would also like to tell the readers that you are someone who should know because of your experience and credentials.
Any more information you could give me is welcomed.

But here is what I currently have to support my position.

"Some insurance companies don’t use the ISO ratings in their calculations of premiums, while others use the ratings along with a number of other factors such as the age of a home and the type of roof.”
"With so many variables involved, it’s nearly impossible for consumers to predict how much money an improved ISO rating could save them, but they should be aware of any factors that might make a difference.”http://www.insurancequotes.com/home/home-insurance-fire-rating

I was told that State Farm divides a county into subzones beyond the 1-7 score and perhaps even smaller divisions than that, to determine your premium rate. They also (reluctantly) admitted that your credit score might be a huge factor in what you pay for insurance.

I called my State Farm agent who said that, in Texas, they did not use ISO, but rather their own internal system that divides up a county. But just to be sure, and get more details, they would contact their underwriters and ask the same questions. I was called back and it was explained that they DO NOT use ISO for homeowners insurance rate calculations. They use their own system which rates an area from 1-7. For example, regardless of the city of Dallas' ISO rating, it may have several different scores, depending upon the many regions the county is divided into. The small suburb I live in (in another county) has an ISO rating of 2, but a State Farm score of 1. They were a little guarded about how they determine their ratings, but they were firm about not using ISO.

I will concede that State Farm might use the ISO more in calculating commercial rates, but I don’t really know.

I know that Georgia requires insurance companies to use ISO to calculate rates. Does New Jersey do so as well?
Since the Texas Dept of Insurance website says that ISO is a NJ based organization, I would wager that it does.http://www.tdi.texas.gov/fire/fmppcfaq.html#a250097

A USFA /FEMA report from California said this:
"State Farm and other insurance companies have moved away from ISO rating. State Farm is the nation’s largest insurer of residential properties and stopped using the ISO rating in 2000.
State Farm developed its own system of determining rates using the five digit zip code system to reflect prior claim experience in that area (Kang, 2006).

Western Mutual Insurance Group described a method similar to State Farm, they based their premiums on losses and risks within a gi ven zip code area and the distance from a staffed fire station.
Premiums are lowest if a home is within 3 miles of a fire station.”https://www.usfa.fema.gov/pdf/efop/efo39907.pdf

There is always a chance that ISO will have some relevance on a home insurance rate.
However this varies depending upon: situation, state, insurance company and more.
I have seen some unsubstantiated reports that in many states, not only does State Farm not use ISO to any serious degree, but neither does Allstate and others.

I also base my claim, that ISO has little to do with most homeowner’s rates, on the fact that in many communities, State Farm writes over half the policies.
My local FD went to the city council and asked for more stations and equipment because this would improve our rating.
Was that true?
Would going from a 2, to a 1 change anyone’s rate?
Given the fact that every person on the council had State Farm, I would say that the statement was false.
(Of course I didn’t mention that to anyone other than the chief, who was a friend of mine.)

I will certainly contact State Farm again, to see if anything has recently changed.

2001 Article in Firehouse Magazine about State Farm's change, with more
details
on the PPC and ISO rating system.
It also talks about the "Subzone Rating Factor" system.
NOTE: Apparently Firehouse has moved the article and this link no longer works.
If someone finds the article, please email me the correct link.http://server.firehouse.com/news/2001/3/20_iso.html